I think I ended up as Forbes' business travel blogger because I’m the only Wharton MBA to become a travel writer. I grew up in New England and worked in finance in Tokyo before B-school. Later I moved to Los Angeles to work in the film industry.
In 1998, stunned by my only ever layoff, I began exercising skills (and, let's be frank, pleasures) I’d long left dormant: writing and traveling. A decade and a half later: so far, so good. In addition to Forbes, I’ve been published from Travel+Leisure and the Los Angeles Times to dozens of Lonely Planet titles. I can speak Japanese and French, read Korean menus and embarrass myself in Spanish, Italian and Chinese.
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No, according to Bijan Vasigh, Professor of Airline Finance at Embry-Riddle Aeronautical University in Daytona Beach, Florida. But there is other potential fallout.

“Bankruptcy is a bit of a misnomer,” he says. “This is Chapter 11, which means restructuring. During the restructuring period, the airline will have protection from the court and can reduce its cost structure in order to move out of bankruptcy.”

So travelers shouldn’t notice a difference, at least for the time being. “American Airlines and American Eagle are operating normal flight schedules today,” said the airline in a statement. Reservations, customer service and “all other operations are conducting business as usual.” The airline says it expects that to continue.

Your miles should be safe too, says Vasigh, based on the Chapter 11 experiences of other airlines. “Since airlines are competing on passenger loyalty, I don’t see much change happening.”

So who is likely to be hurt? “The whole objective of the Chapter 11 is to look at cost structures and negotiate with creditors and labor,” says Vasigh. “Some airports that are not profitable will lose services or at least frequency of services.”

American’s employees aren’t likely to be happy either. Under Chapter 11, other airlines have been able to negotiate significant concessions with labor unions.

American was unique among “legacy” airlines in the US (major carriers around since the industry was deregulated in 1978) in not having declared bankruptcy. Delta, United and US Airways all filed for Chapter 11 in the last decade. In fact, US Airways, Delta and Continental have all been through it twice. Vasigh calls Chapter 11 “very regular in the airline industry.”

“The announcement of the bankruptcy wasn’t really surprising,” concurs Jun Li, who studies the airline industry as a doctoral candidate in the Department of Operations and Information Management at the Wharton School of the University of Pennsylvania. “Mergers of other airlines [particularly Delta with Northwest and United with Continental] put American Airlines in a much worse situation than before.” AMR filed for Chapter 11 this morning in New York.

Vasigh says that this leaves Southwest Airlines as the only pre-deregulation carrier not to have declared bankruptcy, but he puts Southwest in a different category since it has always focused on low-cost operations.

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As a Professor of Airline Finance, I’m surprised that Vasigh got this wrong. I’m going to have to give him a grade of D- for his statement, “In fact, US Airways, Delta and Continental have all been through it twice.” Delta Air Lines has not been through bankruptcy twice. Only once Bijan.

well i am sure we know who loses. the employees will. they always do. maybe this time they will be smarter and take down executive pensions too. and compensation too. hard to take seriously any claims that they will loose talent when its that same talent that got them where they are. if you have tickets on AA, you might get to use them or not and isn’t odd that southwest doesn’t seem to have the troubles that the ‘majors’ do, and they treat their employees much better. couldn’t be that important to do that could it?

Filing for bankruptcy has become as normal among US airlines as arriving late – it happens all the time. In fact, Southwest is the ONLY large domestic carrier that has not gone bankrupt (yet). This is typically an opportunity to reduce labor costs and debts, and if AA follows tradition, the public will notice little difference in what remains of the flying/customer experience.

Honestly, I can’t believe people are loosing sight on who is really going to loose. How about the people that really make the airline operate. The Pilots, Flight Attendants, and Mechanics, etc…

The entire news media except for “The Ed Show” on MSNBC seem to forget that in 2003, American Pilots, Flight Attendants, Mechanics, etc…gave back 23% concessions back to the company (as they were told) to try and help it starve off Bankruptcy. That’s over 1 Billion dollars since 2003!

What happened to all that money? Well, I’ll tell you, the CEO at the time secretly awarded bonuses to all the executives at the company, that same year, along with years of mis-management.

Let’s fast forward to present day. The Executive names at the company might have changed a bit, but the attitudes and corporate greed have not.

While many Flight Attendants, Pilots, and Mechanics struggle with their family’s to survive, Airline Executives at American Airlines continued to reward themselves with hefty bonuses year-after-year.

Well, here we are a few days after Bankruptcy and American Airline Executives and pretty much the entire news media world is claiming it’s the Labor and Fuel costs that forced American into Bankruptcy.

Some of that might be true, but if the Executives from American would have come to the table with some sincerity in trying to iron out a true and equal labor agreement with the aforementioned unions above, maybe we wouldn’t be sitting here today talking about this very subject.

How about buy some new fuel efficient planes? Why did the Airline Executives at American Airlines wait so long to lease newer more fuel efficient planes? Instead, they stuck with old, gas guzzlers.

Wish I had his job. The day prior to American filing for Bankruptcy in New York Bankruptcy court, their then CEO, Gerald Arpey announced his retirement from the company with I’m sure a hefty, as they term it in the Corporate World, “Golden Parachute”. In fact, last year Mr. Arpey was awarded a 6 million dollar bonus for running a UNPROFITABLE company, pretty much into the ground – I have got to get me one of those CEO jobs!

In fact, Mr. Arpey had a job waiting for him the day after he retired. No one can tell me he hadn’t been ironing out details days or even weeks prior to the day he retired – yeah, he was so concerned about bringing his current company back to profitability.

It really is a shame when the very people that have worked so hard, left so much blood, sweat and tears on the ground, even gave back 23% of their own money to the company to try and save it, are pretty much forgotten about and in most cases, are the ones being blamed for this tragedy.